Malta’s pharmaceutical sector is bracing for major shocks to the system as the UK, its main market, withdraws from the European Union.
“We’re stocked to the high heavens. Brexit will affect us quite badly because the UK is now considered a third country,” Mario Debono, head of Pharmaceuticals of the Chamber of Small and Medium Enterprises told Lovin Malta.
“The single market for pharmaceuticals simply doesn’t exist anymore,” he said.
Malta imports between 60-80% of its pharmaceuticals from the UK. Since it’s such a small country, Malta doesn’t have the advantage of economies of scales or capacity to buy high volumes to reduce the price of medicines.
Now, agents are faced with more red tape and the challenge of creating new relationships with other EU exporters. Brexit will affect re-exports too because Malta is a hub for North Africa for medicine.
“Before we used to “ride” on the UK’s pharmaceutical volumes, now we have to ride on Ireland’s and Cyprus’,” Debono explained
Malta must rely on Irish and Cypriot markets because medical labelling must be in an official language of the country, which is English in Malta’s case.
“But Ireland has its own problems. They have 2.5 million people, so the availability of products we can buy is very limited. We’re also limited in choice and price too,” Debono warned.
If Malta’s pharmaceutical agents opt to import from other EU countries like Germany or Italy, every product would need to undergo relabelling for doctors and patients to understand.
One local pharmaceutical distributor has invested in a relabelling facility because of Brexit.
“We’ve had to stop importing certain products because the volume is too low to bother. Two years ago, we created a relabelling facility – a huge cost which we will have to absorb somehow,” he said.
He predicts that Malta will feel the impact in the second half of 2021 because local agents have stockpiled for around six months.
“It also depends on the distributers’ abilities to stock up. There are so many factors that come into play, like cash flow and storage space,” he added.
He also warned that the government didn’t stockpile this year.
“We’ve had three “Brexits” basically. For the last three years the state has regularly stocked up months of stock, but they didn’t this year, keeping the same volume they usually have, which is around six months worth. I would envisage panic in three to six months time from the government’s point of view,” he said.
“I do expect some price increases. Will Malta end up without medicinals? I don’t think so, but we might see some shortages of less important pills,” he said.
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